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Law Column: The sting in the tale of the Crime & Courts Act 2013

Yesterday’s Society of Editors Conference saw John Whittingdale MP, Secretary of State for Culture, Media & Sport, give the key note address. As expected, the issues of Leveson and the Crime & Courts Act 2013 formed a major part of the speech.

As this column has covered on many occasions, there are two key provisions in the 2013 Act which are (rightly) causing anxiety to regional publishers.

The first of those is section 34, which is due to come into force on 3 November. In essence, S.34 means that publishers who are signed up to a Royal Charter approved regulator (of which IMPRESS is trying to become the first) cannot have “exemplary damages” awarded against them in libel and privacy cases – “exemplary damages” being punitive damages to deter future repetition of really poor behaviour.

On the other hand, those who are not signed up to an approved regulator (and IPSO is not approved under the Royal Charter), can have exemplary damages awards made against them. However, to be the subject of such an award, the publisher still has to have behaved with “deliberate or reckless disregard of an outrageous nature for the claimant’s rights”.

So, although clearly still a worry, I see S.34 as being the lesser of two evils.

Then we come to S.40 – the real sting in the 2013 Act’s tail. The section has not come into force yet, but might in the not too distant future. Mr Whittingdale has yet to make his decision.

S.40 means that win or lose, a publisher can be forced to pay both party’s costs – which, as I am sure you are aware, can be quite considerable.

If the publisher defendant is not a member of an approved regulator, the court must award costs against it, unless the claim could not have been resolved through an approved regulator’s arbitration scheme anyway, or “it is just and equitable in all the circumstances….to make a different award of costs or no award of costs”.

We don’t know quite what “just and equitable in all the circumstances” means yet, as the section has not been considered by the courts. But, if the section comes into force, it is quite conceivable that publishers could win court cases and still end up paying their own costs and the costs of the losing claimant. This goes against the usual rule that the loser pays.

Obviously, the above is a nightmare scenario for any regional publisher.

So, the pertinent question is: will S.40 ever come into force?

Well, Mr Whittingdale stated yesterday that while he is not convinced that it is the right time for the introduction of S.40, his mind is not made up. He will examine the issue further in the coming weeks before making a decision.

In theory, if S.40 does come into force, it could be challenged on freedom of expression (Article 10) or right to a fair trial (Article 6) grounds, because of the chilling effect it will have on publishers and their ability to defend libel & privacy actions. However, the costs of challenging it are likely to be prohibitive and far beyond the resources of regional publishers.

Without wishing to be the voice of doom and gloom, we also need to look at S.40 in the context of “no win, no fee” conditional fee agreements (“CFAs”). We’ve written time and time again about the stifling effect that CFAs have on publishers and freedom of expression, and combined with S.40, the costs risks of defending litigation will simply be too much for regional publishers to bear, in many cases.

It is worth noting that when Leveson made his recommendations, it was likely that the law would change so that CFA success fees and the associated insurance premiums would not be recoverable from defendant publishers. In 2013, changes were made so that this is the case with most litigation, but defamation and privacy cases are notable exceptions.

The cumulative chilling effect of CFAs and S.40, should it come into force, will be severe to say the least.

The bottom line for me is that S.40 represents an unfair and unwarranted attack on the regional press’ right to freedom of expression. Only Mr Whittingdale can prevent this from happening.

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